News

Microsoft sued for $90 Million

PalTalk Holdings' lawyer claims that Halo and the Xbox infringe their patents.

Bloomberg is reporting on a trial taking place in Marshall, Texas that may be of some interest to gamers. Microsoft should pay New York-based PalTalk Holdings $90 million for using its inventions, a lawyer told a federal jury Monday.

PalTalk Holdings has sued Microsoft Corp., alleging that Microsoft's Halo first-person shooter games and the Xbox consoles on which they are played infringe upon two patents for inventions developed by MPath Interactive Inc.

PalTalk bought the patents for less than $200,000, Microsoft lawyer David Pritikin told the jury.

The trial centers on technology for ways to control interactive applications over multiple computers. MPath was "a pioneer in the online video industry in the area of real-time, multiplayer online games," PalTalk lawyer Max Tribble told the jury.

"Microsoft had many meetings with MPath regarding their technology, and Microsoft found the technology to be very valuable," he said.

Microsoft said it did review the MPath inventions and chose a different path in developing its games. The technology in question is for an older dial-up method of communicating between computers, and "the patents don't cover the way the 'Halo' games work," Pritikin said.

"Microsoft decided to go in another direction and work with another company," he told the jury. "Obviously, this was upsetting to PalTalk and its employees."

Microsoft also challenges the validity of the PalTalk patents and told the jury that, even if it agrees with PalTalk, "the patents aren't worth much, certainly not $90 million."

The trial before U.S. District Judge David Folsom is expected to last about two weeks.

Gerald says: If I had the chance to buy a couple patents for $200,000 and then flip 'em for $90 million, I'd roll the dice as well. This lawsuit may seem like a stretch, but one has to realize that more cases are settled than not, and people are going to try and get paid. This case didn't settle, though, and went to trial. Let's see what happens.

What really intrigues me is how jury selection will affect the outcome of this case. Are any of the jurors gamers? Do they understand how different dial-up networking is than what Microsoft utilizes today? Will the reputation Microsoft has as an evil empire/monopolist have any effect on the jury?